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Furnishings & Decorby Ron Irwin
SABMiller is learning that a political revolution can cause a branding revolution too. Since the country’s transition to democracy, SABMiller has found that South Africans have shifted from, as Bruce Reinders, SABMiller’s premium portfolio manager, describes it, “the spirit of ‘ubuntu’ (sharing, communal living)” to the “me generation.” Regardless of the average beer drinker’s economic background, consumers are turning to premium brands.
This offers an interesting view of how consumers are willing to pay for premium brands and how they can be reached when most avenues for advertising (TV, product placement, even print ads) are cut off due to the target market’s extreme poverty. In fact, approximately half of all South Africans live below the poverty line, and one in four is unemployed. These problems hit mainly black South Africans who make up just over 80 percent of the population here, and who are, through their sheer numbers, now the drivers of the local consumer industry.
SABMiller knows about selling big brands to massive audiences. The acquisitions of Blue Sword Brewery and Miller Beer in 2001 and 2002, respectively, have helped push SABMiller into the number two position among brewers (by volume) worldwide. It’s hard to find a place in the world that doesn’t sell a beer made by the company. Yet SABMiller’s traditional shortcoming has been in selling to the elusive premium market; the company has, for years, prided itself on making beers for the masses, whether they are in Latin America, Asia, America or Africa.
But that’s all set to change.
South Africa, generally, may be a poor country, but the citizens are willing to splurge when it comes to beer. SABMiller’s cheaper beers have reached a plateau in sales; the premium brands are selling so well that SABMiller just acquired Italian Peroni Nastro Azzurro beer, a European brand the company reintroduced as standing for all the things we love about Italian brands: high-fashion, sexual allure, and premium price. This beer, together with Miller Genuine Draft and its Czech addition Pilsner Urquell (acquired in 2003), is another high-end brand that would seem to be out of reach for the average cash-strapped South African. Nonetheless, in what seems like a move contrary to common sense, SABMiller brazenly announced in March that it is set to launch a US$ 50 million global brand campaign built around the Peroni offering, proving that it is willing to spend the money in order to become a heavyweight contender in the premium beer game.
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